Reality check for the much-hyped Origami PC

Bill Gates' vision of an ultramobile PC seemed like a winner: a device with all-day battery life, yet small enough to fit in a pocket and much cheaper than a laptop.

But as devices begin to come out a year later, reality still trails Microsoft's ambitions. The first generation of devices, being announced Thursday and already featured on Microsoft's site, are bigger, pricier and more power hungry than the software maker had hoped.

Microsoft acknowledges that instead of a mass-market hit riding a wave of prelaunch hype, these devices are likely to appeal only to the most hard-core gadget fans.

"This is definitely our first step in looking at the area of ultramobile PCs," said Mika Krammer, a Windows marketing director for Microsoft's mobile platforms.

Over the last year, several PC makers have been readying minitablets under the Origami code name. These minitablets are capable of running Windows XP along with a "Windows Touch Pack" that allows the devices to be more easily controlled using fingertip input. Microsoft expects that "gadget geeks" will make up most of the early buyers of the devices, which weigh roughly two pounds, pack a 7-inch screen and cost around $800.

"To really hit the mass market...in the hundreds of thousands and the millions of customers, we have to improve," Krammer said. The devices that begin shipping in April are likely to be more of a niche product, he said.

That's a far cry from the "dream" machines some envisioned when Gates

In some ways, Microsoft has been the victim of its own success and some wild speculation. Rumors circulated that the company might have a portable Xbox or iPod killer in the works. Although Microsoft had hoped a teaser site would generate interest ahead of the launch, it had no idea it would create .

"We had anticipated some interest in what we were doing, but this has received a lot more interest than we expected," Krammer said.

In search of a market
The initial devices run the Tablet PC edition of Windows XP, along with the "Touch Pack," which includes new software for playing back media, as well as a "program launcher" that makes it easier to find and run programs stored on the device. New settings so make scroll bars and icons bigger and more easily navigated by a fingertip. Text can also be input using two thumbs via an on-screen keyboard. The software includes the popular puzzle game, Sudoku.

During a joint presentation with Intel at the CeBit trade show in Germany, Microsoft will show its software running on a Samsung device. Other Intel-based products are expected from Taiwan's Asus and China's Founder, while some companies, including Tablet Kiosk and PaceBlade Japan, are using processors from Via Technologies.

NPD Group analyst Stephen Baker was skeptical of how much appeal the first round of devices will have. "It's a product in search of a market," he said. It's too expensive for the things it does, Baker said, and is "too under-featured to do some of the other things it needs to do."

One opportunity exists, Baker said, if hardware makers can bring down the price tag by convincing cellular carriers to subsidize the product for buyers that sign up for new wireless service.

The Origami specification doesn't require any kind of wireless connectivity, but many of the devices will have Wi-Fi, Bluetooth or both. There is also the possibility of a cellular data modem, which would provide an option for the devices to be sold--and partly underwritten--by wireless carriers. Of course, such wireless technology also adds to the cost of making the devices.

Intel, too, sees a bigger market if the industry can produce smaller devices with better battery life and a lower price tag. It showed its concept devices on Tuesday at its annual Intel Developer Forum.

The first generation devices are "going to be great for early adopters," Intel Marketing Director Brad Graff said. But for the masses, "These are bigger than what we want."

As for the next generation, Microsoft is already working on how to equip future devices with Windows Vista, the operating system update coming later this year. Vista has built-in support for touch screens and power-management features that could be useful Origami devices. Krammer said Microsoft hopes to have ultramobile PCs running Vista available as soon as the new Windows version ships.